India will not achieve 40 GW rooftop solar target with current policies: Report

India will not be able to achieve its ambitious target of 40 GW of installed solar rooftop capacity by 2022, if it continues with current policies.Kaavya Chandrasekaran | ET Bureau | March 18, 2016, 16:41 IST

India will not be able to achieve its ambitious target of 40 GW of installed solar rooftop capacity by 2022, if it continues with just the policies and incentives it is currently providing, says a report “Scaling Up Private Investment in Rooftop Solar”, by the Solar Rooftop Policy Coalition, a consortium of the UK Department for International Development, the Climate Group, the Shakti Sustainable Energy Foundation and the Nand and Jeet Khemka Foundation.

India plans 100 GW of solar capacity by 2022, of which 40 MW will be on rooftops and the rest, ground projects.

The current installed rooftop solar capacity (end-October 2015 figures) is around 0.525 GW. The report predicts that the push the government has been giving this segment will at best raise the figure to 13.5GW by 2022.

It sets forth around 50 recommendations for a still harder push which it maintains can almost double capacity to 26GW by 2022. None of its proposals require additional fiscal commitments from the government for this segment.

“The 40 GW target requires 86% growth each year which is faster than the growth in mobile phone connections in the 2000s,” the report notes. It thereafter ignores the 40 GW figure as a pipedream and concentrates solely on the recommendations to achieve 26 GW.

“We have talked to many CEOs. The consensus is that we will get 6-10 GW. This is the feeling in the industry with the current policy framework. We are just the first ones to say it,” said Vinay Rustagi, Managing Director, BRIDGE TO INDIA, who contributed to the report.

“There are two critical foundations for growth in this segment – operationalising net metering and getting the utilities involved,” said Philip Marker, Project Director, at the report’s release. “Maximising rooftop space too is important because currently projects are delayed because of absence of policies on rooftop by resident welfare associations, industrial area bodies and local groups.”

Financial incentives have their limitations, the report points out. “Capital subsidies have supported the market but their impact has been reduced because of limitations in the funds available,” it said.

It also added that accelerated depreciation, whereby developers are allowed to value depreciation at 80 per cent in the first year of deployment itself (while computing taxes to be paid) has played a role in incentivizing the sector, but has also deterred important capital resources from entering it.

Varsha Joshi, Joint Secretary in the Ministry of New and Renewable Energy, briefly outlined the recent steps undertaken by the ministry to boost rooftop solar. “Many banks as well as international agencies are providing aid. The subsidy budget has been scaled up from Rs 600 crore to Rs 5000 crore. Skill development programmes for training staff too are underway,” she said.

Releasing the report, Power and MNRE Minister Piyush Goyal promised the government would “implement every comma and apostrophe” in it. He added that as far as the commercial and industrial sector was concerned, rooftop solar was a “no-brainer.”

The idea that airports should implement rooftop solar to ward of land encroachment is being pitched to them. “Such innovative ideas should be considered so rooftop becomes the norm rather than the exception everywhere,” he added.